Among those criteria were the exclusion and destruction of Hamas, defensible borders for Israel, recognition of Israel as a Jewish state, and Jerusalem as Israel's united capital.

On Wednesday PA Chairman Mahmoud Abbas agreed to admit Hamas to the PA, and PA Prime Minister Salam Fayyad said the PA would begin moving unilaterally to make eastern Jerusalem its capital.

Netanyahu's upcoming speech at Bar Ilan, dubbed Bar Ilan II by pundits, was expected to be an updated installment of his original Bar Ilan speech for the Israeli public before Netanyahu travels to the U.S. where he will address Congress.

But Israeli politicians and pundits alike have been left guessing about the content of his Bar Ilan II speech as it comes after two years of stalled talks and the PA decision to abrogate the Oslo Accords and seek a unilateral declaration of PA statehood by the United Nations in September.

Dayan says he hopes Netanyahu will seize the maximum benefit from new developments.

"There are now two crises," Dayan said. "The PA has chosen to cancel all agreements with Israel and go to the U.N. and they also decided to admit Hamas to their ranks. Every crisis is also an opportunity. The prime minister should say he no longer consents to a PA state, that we are released from Oslo, and move to fulfull Zionist dreams."

Dayan believes the annexation of Area C is now a required step. "It's not enough for Israel say she no longer consents to a Palestinian state, but it's time to exert Israeli sovereignty and annex the open spaces and Jewish communities in Judea and Samaria. It is time we become citizens with equal rights like citizens in any other place in the country. The Palestinians launched a political war against us, but it's not strong enough in real terms to win."

Dayan called on politicians to restore the confidence and sense of security of Israelis in Judea and Samaria, who he says were often abandoned to the PA police under Oslo.

"I'm having a lot of meetings with Central Command and the commander in Judea and Samaria," Dayan said. "And in meeting with them I begin with a warning about security cooperation with PA security forces. The notion is completely surreal and the proof is what we saw happen at Joseph's Tomb."

Dayan argued that despite mistakes made since the Oslo Accords were signed, the Israeli army is a strong army and can solve the problems that now exist.

"Of course we made mistakes and will pay them a price," Dayan said philosophically. "We were wrong. But we should not scare ourselves. We should now restore confidence. If Hamas will take over the cities of Judea and Samaria, we must make it clear we will go back to them - Hevron, Shechem, and Ramallah - and return them to Israeli control."

"We need to pressure Netanyahu to use the situation to Israel's advantage... to declare the Oslo process, which was the biggest strategic mistake Israel ever made, dead. We've paid with over 1,000 dead already. Withdraw immediately the government's assent for a PA state. The army needs to announce all security cooperation agreements are off and take full responsibility for all Israeli citizens' security today, not tomorrow."

"This is the responsibility of political leadership," Dayan said. "The prime minister is the one who must take the decision. He should show he is committed. It is time to return to Zionist activism and leave the dark days of Oslo behind us."